Nearly a million of our elderly of this period have had their life's savings wiped out by high doctor and hospital costs. They are now compelled to live out their remaining years on their small social security check they receive monthly. Had they had hospital coverage, their life's savings would have enabled them to continue to live better than at a subsistence level, by using up small amounts of their savings each year.

The following are a few examples of destitute cases:

(1) Mrs. Anna T. Strojny, 2941 North Lowell Avenue, age 63. Has been active with the public all her life-disabled and unable to walk for 10 years due to arthritis. Has been in five hospitals since October 1953 (three hospitals at 2 months each and two hospitals at 6 weeks each). Blue Cross hospitalization did not cover the hospital or the doctor bills; has been paying them out for the past 5 years and all her savings are gone. Her husband's and her only income is social security (husband's $105, wife's 39.40, total $144.40). At the end of some months she does not have 25 cents for a loaf of bread, so her daughter must feed her until she gets the check on the 3d of the month. She is still under the doctor's care, who prescribes medication by phone because he will not come to the house and she is unable to go to the doctor, so she just suffers because she cannot afford anything else. Due to arthritis she had numerous electric treatments and whirlpool baths but nothing helped; now she is helpless and penniless waiting for the medicare bill to go through where she can turn for help.

She has been active all her life as a social worker in the community and has been a truant officer for the board of education for 20 years. She gave her health to the public and now is disabled possibly for the rest of her life. She says she has her own little five-room bungalow but she cannot take out a brick and eat it and if something goes wrong and repairs come up, that takes away the bread and butter from her mouth. She must lay away $33 per month for real estate tax and $15 to $20 per month for medicine.

She made over 12,000 people of Chicago citizens of the United States. In March of 1950 she was recognized and awarded with a scroll by the Congress of the United States for Americanization work, signed by both Senators of Illinois and five Congressmen and, although confined to a walker, she still helps out people who come to her home. Being a born organizer she now organized the Polish-American Senior Citizens' Council of Chicago. If she could get help toward improving her health, she could do more.

(2) Mrs. Florence Kulibaba, 2038 North Stave Street, age 65. Has been in hospitals five times in 1952, 1954, 1956, 1959, and 1961. Blue Cross insurance does not cover all the bills; therefore, she used up all her savings and is now penniless and is living on social security at $82 per month. Her medicine costs her $15 to $20 monthly. She is still under doctor's care and should go to the hospital again but cannot afford it. She lives with her daughter who helps her out, and is waiting for medicare bill to pass to help her health.

(3) Mrs. Mary Witt, 1107 North California Avenue, Chicago, age 80. Has been active all her life until 1953 when she entered the hospital for an operation and remained 6 months. She has been ill ever since (10 years) and now has ulcerated legs because of which she attends the clinic every week for 10 years. It is miserable when she is unable to walk or to get on the bus, yet cannot afford a cab. She receives $79 old-age pension, $40 social security, total $110 per month. Pays $65 rent, $17 gas and electric, which leaves her $48 monthly to live on and all other incidentals including medicine. Friends who know of her plight bring food and clothing.

(4) Mr. and Mrs. Casimir and Henryka Patla, 900 North Wolcott Street, Chicago, Ill., ages 76 and 74. Mr. Patla has been in the hospital two times, in the fall of 1955 and again in the spring of 1956. Since then he is under doctor's care and attends the clinic to this day. Wife, Henryka, was also in the hospital two times and is still under doctor's care. All their savings are gone and at present they are living on social security and no other income. Mr. Patla receives $105 per month and Mrs. Patla $82, total $187. Their five-room rent amounts to $65 per month, medicine $30 monthly, gas and electric $13, while the remainder is used for food. If unforeseen expenses occur, there is a shortage of food.

(5) Charles and Eleanore Kiel, 1017 North Keystone Avenue, ages 78 and 75. Mr. Kiel was in the hospital in 1947 and has been ill now for 15 years suffering with inflammation of the sciatic nerve. He also had an eye operation for cataract in 1960. Hospital bill amounted to $200.50, doctor $400, contact lenses, $100.

Mrs. Kiel suffers with migraine headaches which cannot be cured but it takes money to get relief. (These headaches persist for 50 years can be verified.) Mr. Kiel receives $92 per month social security and Mrs. Kiel $47.50, total $142.50. They spend between $40 and $45 monthly for medicine. They have a little five-room home with no income and sometimes repairs take a part of their social security which leaves no money for food in the last week of the month.

(6) Bruno Rosniok, 2258 West 19th Street, Chicago, age 63. In hospital for 2 months; had leg amputated. Strangers help and take care of him since he is not yet on social security.

(7) Walter Gacek, 2258 West 19th Street, Chicago, age 70. In hospital for 2 months; operated on prostate gland; also hospitalized in 1953. Receives $78 monthly social security out of which he pays room, medicine, gas and light. His landlord brings him leftover food from affairs at the casino.

(8) John Brzeski, 3420 North Hamlin Avenue, Chicago, age 81. In hospital in 1957, at home now; paralyzed since, for 7 years. Gets social security $40, wife Eleanor gets $82 monthly. Therapy treatments amount to $12 per week. There are hundreds of cases similar to those listed above on which we will keep you posted as we accumulate them.

Very truly yours,

ANNA T. STROJNY, Executive Director.

TESTIMONY ON BEHALF OF THE SOCIALIST PARTY, U.S.A., AND SOCIAL DEMOCRATIC FEDERATION, BEFORE THE HOUSE WAYS AND MEANS COMMITTEE, NOVEMBER 22, 1963, ON H.R. 3920

My name is Robert Whitney Tucker. I am chairman of the Committee on Medical Economics of the Socialist Party, U.S.A., and Social Democratic Federation. My office address is 1182 Broadway, New York, N.Y.

Gentlemen, there are millions of Americans who would prefer to see, not the present proposed timid and inadequate medical reform, but outright socialized medicine. Indeed we believe this may be the one issue above all others where the Socialist view is the view of the majority of the American people.

Let me begin by reiterating two points we have made in a previous hearing, but which we feel should be called again to your attention:

First, we see no reason why the benefits now proposed should be limited at all as to time. People who are chronically or catastrophically ill are precisely the people least able to pay their hospital bills. They are very few in numbers and in national terms the total of their bills is a very tiny amount. Putting a time limit on benefits is therefore a pinchpenny gesture, made at the cost of immense private tragedy to just a few of our citizens. We believe your committee should ask the Department of Health, Education, and Welfare to prepare an estimate of how much additional money would actually be needed for unlimited benefits-and also how much money would be saved in bookkeeping costs if the Department were not required to keep close records of benefit days.

Second, the Socialist Party wishes to state again its firm opposition to all proposals to let any benefit money be paid to private insurance companies. We see no harm, and some positive good, in allowing an option whereby social security will pay all or part of the premiums for nonprofit or cooperative plans offering comparable benefits. But we feel it's outrageous to suggest that taxpayers' money be used to help private companies support their political lobbies. their advertising, their executives' expense accounts. America is already notorious for its philosophy of "socialism for the rich, private enterprise for the poor"; this philosophy prevails with respect to farm parity payments, defense contracts, space communications, and many other areas of our national life-let us not now extend it to health insurance. We believe it is not the business of a democratic government to subsidize the wealthy with pennies from the poor.

A point we have not discussed at previous hearings, but which Socialists are especially qualified to speak to, is the allegation made by enemies of this bill that it is socialistic or socialized medicine. The American Medical Association has gone so far as to quote us, out of context of course, in its efforts to argue this point.

Let me say as plainly as I know how, from the viewpoint of proponents of socialized medicine, the original Forand bill was a pitiful travesty of the comprehensive program that's really needed-and the successive waterings down of that bill into the present bill are shameful.

Yet, we support this bill, despite its terrible inadequacy, because it establishes precedents that need to be established and which have long since been taken for granted in most civilized nations: the precedent that the health of the whole people is a proper concern of the whole people (and that governmental mechanisms are a proper vehicle for expressing that concern), and the concept that health is a basic social need, like education or protection from fire or protection from burglary, and therefore not a proper monopoly for private enterprise. We see no reason why people who accept this notion should therefore be Socialists, any more than a man is a Socialist because he approves of public education or public fire departments; for our own part, we see the need for socialized medicine more clearly because we are Socialists, but we certainly do not claim a monopoly on the notion. It is perfectly true, of course, and evident to everybody, that the precedents this bill establishes are also the precedents which some other bill, in some other day, could build upon to begin a real system of socialized medicine. But again, there are many who support it for its own sake, and in any event, the fight over socialized medicine is altogether another fight than this one. We think it is preposterous that this inadequate bill should be fought over as though it were socialized medicine in its own right. Let me repeat: it is not socialized medicine.

There are many more things we could say, but we are anxious not to repeat testimony we have given before. Four years ago we prepared a 20,000-word study of the entire problem of medical care in America, in which we blueprinted solutions to the problems we all recognize as existing; this document was sent to Members of Congress and subsequently we have published it, with minor revisions, as a pamphlet, "The Case for Socialized Medicine." We will gladly send free copies to any Congressman who missed it. Two years ago we testified on particular points in the present bill. We realize that the present hearings are simply a reenactment of hearings that have been held several times before, over the same bill, with the same people saying the same things. For our part, we still have enough respect for Congress to feel we ought not to waste its time repeating ourselves. We also feel our country would be happier if the House Ways and Means Committee showed the same respect.

This brings me to the final point we want to read into the record concerning the nature of these hearings. The entire Nation knows that nobody is going to change his mind because of these hearings; that no significant new information is going to be unveiled; that no serious rewriting of the bill is going to take place. The real function of these hearings is to delay still further, by solemn public farce, any open discussion of this bill by our elected representatives. If everybody knows these things, why then are we so indelicate as to mention them out loud? Because we want to make a further point, which is this: If the proposal for social security hospital care were to be defeated in an open session of Congress, we would feel sad about it, but at least we would feel we had been honestly defeated. But the present tactic of holding hearing after hearing, but refusing to report the bill out, is more than a farce-it is an outrage upon democratic process. Indeed, it may properly be characterized as unAmerican, because it subverts the people's respect for Congress. We urge the prompt adoption of the bill by this Congress.

STATEMENT BY J. DOUGLAS BROWN, DEAN OF THE FACULTY AND PROFESSOR OF ECONOMICS, PRINCETON UNIVERSITY

Long and thorough economic analysis of the pressing problem of assuring adequate medical care for the aged population of this country has led me to the firm conviction that the old-age, survivors, and disability insurance program should be extended to provide a basic floor of hospital care for aged beneficiaries. This analysis may be summarized as follows:

1. The proportion of the aged to the working population will continue to rise. 2. The costs of living for the aged, and particularly the necessary costs of health care, will continue to rise.

3. Since it is clear from experience that the current income of most superannuated persons will be inadequate to meet these rising medical costs, the excess of current costs over current income will need to be provided by one or more of the following means:

(A) Savings accumulated by the individual or spouse during working life.

(B) The appropriation by Government of funds derived from general taxation to provide greatly extended medical care for the aged on a needs-test basis.

(C) The loading, under voluntary, private health insurance programs, of the premiums paid by persons of working age by an amount sufficient to meet the higher medical costs of the aged beneficiaries of such plans.

(D) An increase in the level of cash old-age insurance benefits sufficient, on average, to meet the variable and uncertain costs of illness in old age.

(E) The inclusion of basic medical benefits for aged beneficiaries as "insurance within insurance" under the OASDI program, with costs averaged over the whole working life of all participants.

These five means of meeting the deficit between rising medical costs and declining income, which millions of our older people will face, can be analyzed briefly.

A. Savings accumulated by the individual or spouse during working life

For the individual, not only is the span of life after retirement uncertain, but the incidence and costs of illness in old age are doubly uncertain. It can be estimated that, on average, these costs will be approximately two to three times higher per year in old age than in working life. The costs of medical care in old age may well continue to rise faster than other costs of living, both in price per service and in the elaboration of services, between the time of saving and the time of need. It is, therefore, very difficult for most wage earners to accumulate and distribute a savings fund throughout their life and that of their wife in a way which will afford reasonable security against the uncertain costs of medical care. Serious contingencies may dissipate savings long before the eventual death of the surviving spouse. For all but the most fortunate, the most effective mechanism for protection is not savings, but insurance.

B. The appropriation by Government of funds derived from general taxation to provide greatly extended medical care for the aged on a needs-test basis The public provision of medical care has been steadily extended in the last quarter century. This has been a necessary development in areas of costly treatment, such as mental health, or in the protection of underprivileged persons. The wide extension of public provision of medical care to the aged may prove increasingly necessary if we do not develop other means of meeting the problem. A business recession would greatly increase present needs. To put normally self-reliant persons under the pressure to declare themselves indigent is not an attractive solution. A needs test for medical care distinct from a needs test for general assistance involves serious administrative difficulties. We have made great progress in preventing dependency and the fear of dependency through social insurance. It would be a disheartening setback if rising costs of medical care cause a retrogression to poor relief methods for the protection of more and more of our older citizens.

C. The loading, under voluntary, private health insurance programs, of the premiums paid by persons of working age by an amount sufficient to meet the higher medical costs of the aged beneficiaries of such plans

The use of the insurance mechanism in meeting the risks to individuals of the cost of medical care is an important forward step. The averaging and sharing of the costs of illness among currently employed persons is an effective economic device. It is essentially an assessment form of insurance. In a given age segment, without adverse selection, contributions and benefits can be brought to relatively close balance, subject to frequent revision, however, as costs of care or frequency of care rise. But the continuance of older, retired persons under a voluntary health insurance program creates serious problems. Not only do benefit costs for the aged rise sharply, but their ability to pay premiums declines. The inclusion of the aged under voluntary health care insurance introduces a life-risk factor and the possibility of serious adverse selection. This has brought disaster to assessment schemes of insurance, time out of mind. Younger contributors drop out if contribution rates rise because of the burden of older beneficiaries. Older beneficiaries drop out if they are charged differential rates higher than they can afford to pay. If benefits to the old are reduced, even though such reduction is neatly camouflaged in the fine print, the old are left insecure.

It is my earnest conviction that private, voluntary insurance programs cannot meet the basic problem of rising medical costs in old age. If they attempt to do so by loading the premiums paid by younger individuals, they will impair their usefulness in their proper field of service.

D. An increase in the level of cash old-age insurance benefits sufficient on average, to meet the variable and uncertain costs of illness in old age Except for the effects of inflation, most of the expenses of the aged are more stable from year to year than those of the working population. The costs of illnesses are the great exception, in both incidence and amount. Illness in old age is likely to be more frequent, but still highly unpredictable as between individuals. It is likely to be more costly when it comes. Most difficult to meet from level amounts of benefits are the costs of final illness. A level amount of benefits that would protect one individual might fall far short for another. To raise the level of benefits to meet this risk would be a costly and yet ineffective means of protecting the aged. This requires "insurance within insurance." E. The inclusion of basic health benefits for aged beneficiaries as “insurance within insurance" under the OASDI program, with costs averaged over the whole working life of all participants

The old-age insurance system is more than a quarter of a century old. It has served our people well. It has not undermined free enterprise nor introduced "socialism." It is a practical and economical means of protecting our citizens from dependency, with dignity and as a matter of right. It provides a service which only the Government can provide, because the Government can assure itself of continuing contributions, can avoid adverse selection, can widely average costs, and has the capacity to adjust income and outgo as the welfare of the people demands.

The costs of illness in old age are a properly insurable risk. But they are a life risk, since their high incidence and amount are directly related to a stage of life which, like death itself, can come but once to each of us. Therefore, as a people, we should insure against these costs during our productive years, as a part of our insurance against all other causes of dependency during old age. But because of their great impact and uncertain incidence within the period of old age, these particular costs, at least in basic part, should be met by "insurance within insurance."

Whatever limits may be necessary, to be truly effective, such "insurance within insurance" should be measured in terms of the health care required, and not in dollar amounts. There are many ways in which the Government can arrange for the provision of such care, once the funds are available. To say that the financing of any product of service by Government payments is "socialization," is to consign that meaningless term to a large segment of American industry, American education, and American health services in which executives, professional men, and wage earners are contributing to the welfare of their fellow men with freedom and dignity.

After more than 25 years of evolution, the old-age insurance system of this country is a tested and effective mechanism for the provision of basic protection of our aged citizens against the costs of illness. No other means or mechanism can perform this necessary function with as much economy in cost, or with as much respect for the needs, rights, and dignity of all concerned.

STATEMENT BY GEORGE BAEHR, M.D., BEFORE HEARINGS OF THE HOUSE COMMITTEE ON WAYS AND MEANS ON MEDICAL CARE FOR THE AGED

I am George Baehr, M.D., of New York, chairman of the Public Health Council of the State of New York and member of the Board of Hospitals of the City of New York, but I appear as an individual practicing physican and not as a representative of the State or local government of New York. However, I believe that my opinions on hospital care of the aged through social security coincide in most essential respects with those which have been expressed publicly both by the Governor of my State and by the mayor of New York City.

I am also director emeritus of medicine of the Mount Sinai Hospital in New York and was for many years clinical professor of medicine at Columbia University. I have served as vice president of the American Public Health Association and as president of the New York Academy of Medicine. I was president and medical director of the Health Insurance Plan of Greater New York for 7 years and am now medical consultant to the plan which provides prepaid comprehensive medical care for 675,000 New Yorkers. At present I am a trustee or director of the Community Service Society, the State Charities Aid Associa